Inside the Race for the Top Job on Wall Street

After college, Mr. Schwartz got into finance. His first day on a trading floor was Oct. 19, 1987. The stock market plunged 22 percent on what came to be known as Black Monday. He remembers a colleague crying.

“If you’re around that environment, I don’t know anybody that couldn’t be sensitized to the cyclical nature of the markets,” Mr. Schwartz said. It left him with a permanent sense of jitters over how easily capital can be destroyed.

.. “He’s always been a good shepherd internally in terms of managing risk and balancing that with clients’ interests,”

.. Mr. Schwartz is cautious and can be tightly scripted. As a general rule, he waits 48 hours to collect his thoughts before addressing someone who has really annoyed him.

Some colleagues say he has a tendency to “mark to market” his underlings — meaning that, in accounting terms, he assesses their value to his objectives and treats them accordingly. That has frustrated some people.

.. In the early 1990s, Mr. Solomon joined Bear Stearns, where he helped run the bank’s junk bonds division, working with bankers and salespeople to devise and sell higher-risk bonds. At one point, he helped a Dallas movie theater company, which was struggling to finance its expansion into Mexico, raise money through a complicated bond transaction.

.. In 1997, Mr. Solomon worked alongside Jon Winkelried, then the co-head of Goldman’s bond division, on a deal to raise money for the Venetian resort in Las Vegas. Mr. Winkelried was impressed with Mr. Solomon’s handling of the deal and offered him a job running Goldman’s leveraged finance team, again raising capital for companies through higher-risk bonds. It was a rare instance of Goldman hiring an outsider and awarding him the rank of partner.

.. “I thought he was on the leadership track at Bear,

.. Once, he showed up to pitch for the Lululemon Athletica initial public offering wearing a maroon jacket and long sweatpants made by the brand. His colleagues were similarly outfitted. “Everyone on the other side of the table is in suits and ties,” Mr. Solomon recalled. “It threw people off.” Goldman won a lead role on Lululemon’s I.P.O.

.. Mr. Solomon also leaned on executives in Goldman’s human resources office to hire far more women. Given the nearly even split in society, he argued, there was no reason that Goldman’s ranks should not be equally balanced between men and women. He has taken that message on the road, too.

Trump threatens to break the glass on DOJ succession plan

The little-noticed document is usually only applicable in the event of an attack or crisis.

That has legal experts closely examining the dry executive order to figure out who might be next up to bat, or, as Democratic lawyers and consultants view it, who might serve as Trump’s next sacrificial lamb.

.. “We know Rachel Brand is the next victim,”

.. “For those of us who have high confidence in Rachel — the more confidence you have in someone in this role, the less long you think they’ll last,”

.. Typically, the solicitor general would be next in line after the associate attorney general, followed by the list of five assistant U.S. attorneys, the order of which would be determined by the attorney general. But none of those individuals have been confirmed by the Senate, and they would be unable to serve as acting attorney general without Senate confirmation.

.. Because of that, the executive order comes into play — one that puts next in line after Brand the U.S. attorney for the Eastern District of Virginia, Dana Boente.

  1. .. Boente, who was briefly thrust into the no. 2 spot at the Justice Department after Yates was fired, was also tasked with phoning Preet Bharara, then U.S. Attorney for the Southern District of New York, to deliver the unexpected news that he was fired. At the time, Boente also vowed to defend Trump’s travel ban in the future.
  2. .. Eastern District of North Carolina, John Stuart Bruce; and the U.S. attorney for the
  3. Northern District of Texas, John Parker.

.. Trump’s desire to rid himself of Mueller, at potentially any cost

.. The president, who friends said does not enjoy living in Washington and is strained by the demanding hours of the job, is motivated to carry on because he “doesn’t want to go down in history as a guy who tried and failed,” said the adviser. “He doesn’t want to be the second president in history to resign.”

 

Why Tim Cook is Steve Ballmer and Why He Still Has His Job at Apple

After running Microsoft for 25 years, Bill Gates handed the reins of CEO to Steve Ballmer in January 2000. Ballmer went on to run Microsoft for the next 14 years. If you think the job of a CEO is to increase sales, then Ballmer did a spectacular job. He tripled Microsoft’s sales to $78 billion and profits more than doubled from $9 billion to $22 billion. The launch of the Xbox and Kinect, and the acquisitions of Skype and Yammer happened on his shift. If the Microsoft board was managing for quarter to quarter or even year to year revenue growth, Ballmer was as good as it gets as a CEO. But if the purpose of the company is long-term survival, then one could make a much better argument that he was a failure as a CEO as he optimized short-term gains by squandering long-term opportunities.

How to Miss the Boat – Five Times
Despite Microsoft’s remarkable financial performance, as Microsoft CEO Ballmer failed to understand and execute on the five most important technology trends of the 21stcentury:

  1. in search – losing to Google;
  2. in smartphones – losing to Apple;
  3. in mobile operating systems – losing to Google/Apple;
  4. in media – losing to Apple/Netflix;
  5. and in the cloud – losing to Amazon.

Microsoft left the 20th century owning over 95% of the operating systems that ran on computers (almost all on desktops). Fifteen years and 2 billion smartphones shipped in the 21st century and Microsoft’s mobile OS share is 1%. These misses weren’t in some tangential markets – missing search, mobile and the cloud were directly where Microsoft users were heading.

.. Execution and Organization of Core Businesses
It wasn’t that Microsoft didn’t have smart engineers working on search, media, mobile and cloud. They had lots of these projects. The problem was that Ballmer organized the company around execution of its current strengths – Windows and Office businesses. Projects not directly related to those activities never got serious management attention and/or resources.

For Microsoft to have tackled the areas they missed – cloud, music, mobile, apps – would have required an organizational transformation to a services company. Services (Cloud, ads, music) have a very different business model. They are hard to do in a company that excels at products.

Ballmer and Microsoft failed because the CEO was a world-class executor (a Harvard grad and world-class salesman) of an existing business model trying to manage in a world of increasing change and disruption. Microsoft executed its 20th-century business model extremely well, but it missed the new and more important ones. The result?  Great short-term gains but long-term prospects for Microsoft are far less compelling.

.. Visionary CEOs are product and business model centric and extremely customer focused.

The best are agile and know how to pivot – make a substantive change to the business model while or before their market has shifted. The very best of them shape markets – they know how to create new markets by seeing opportunities before anyone else.

.. Between 2001 to 2008, Jobs reinvented the company three times. Each transformation – from a new computer distribution channel – Apple Stores to disrupting the music business with iPod and iTunes in 2001; to the iPhone in 2007; and the App store in 2008 – drove revenues and profits to new heights.

.. They know who their customers are because they spend time talking to them. They use strategy committees and the exec staff for advice, but none of these CEOs pivot by committee.

.. One of the strengths of successful visionary and charismatic CEOs is that they build an executive staff of world-class operating executives (and they unconsciously force out any world-class innovators from their direct reports). The problem is in a company driven by a visionary CEO, there is only one visionary. This type of CEO surrounds himself with extremely competent executors, but not disruptive innovators

.. When visionary founders depart (death, firing, etc.), the operating executives who reported to them believe it’s their turn to run the company (often with the blessing of the ex CEO).  At Microsoft, Bill Gates anointed Steve Ballmer, and at Apple Steve Jobs made it clear that Tim Cook was to be his successor.

Once in charge, one of the first things these operations/execution CEOs do is to get rid of the chaos and turbulence in the organization. Execution CEOs value stability, process and repeatable execution. On one hand that’s great for predictability, but it often starts a creative death spiral – creative people start to leave, and other executors (without the innovation talent of the old leader) are put into more senior roles – hiring more process people, which in turn forces out the remaining creative talent

.. As process oriented as the new CEOs are, you get the sense that one of the things they don’t love and aren’t driving are the products (go look at the Apple Watch announcements and see who demos the product).

.. The problem is that a supply chain CEO who lacks a passion for products and has yet to articulate a personal vision of where to Apple will go is ill equipped to make the right organizational, business model and product bets to bring those to market.

.. The dilemma facing the boards at Microsoft, Apple or any board of directors on the departure of an innovative CEO is strategic: Do we still want to be a innovative, risk taking company?  Or should we now focus on execution of our core business, reduce our risky bets and maximize shareholder return.

Tactically, that question results in asking: Do you search for another innovator from outside, promote one of the executors or go deeper down the organization to find an innovator?

.. Steve Jobs and Bill Gates (and 20th century’s other creative icon -Walt Disney) shared the same blind spot: They suggested execution executives as their successor

.. if the board decides that the company needs another innovator at the helm, you can almost guarantee that the best executor – the number 2 and/or 3 vice president in the company – will leave, feeling that they deserved the job. Now the board is faced with not only having lost its CEO, but potentially the best of the executive staff.

.. The irony is that in the 21st century, the tighter you hold on to your current product/markets, the likelier you will be disrupted

.. Increasingly, a hands-on product/customer, and business model-centric CEO with an entrepreneurial vision of the future may be the difference between market dominance and Chapter 11.

Summary:

  • Innovation CEOs are almost always replaced by one of their execution VPs
  • If they have inherited a powerful business model this often results in gains in revenue and profits that can continue for years
  • However, as soon the market, business model, technology shifts, these execution CEOs are ill-equipped to deal with the change – the result is a company obsoleted by more agile innovators and left to live off momentum in its twilight years

Rise of Saudi Prince Shatters Decades of Royal Tradition

While vacationing in the south of France, Prince bin Salman spotted a 440-foot yacht floating off the coast. He dispatched an aide to buy the ship, the Serene, which was owned by Yuri Shefler, a Russian vodka tycoon. The deal was done within hours, at a price of approximately 500 million euros (roughly $550 million today), according to an associate of Mr. Shefler and a Saudi close to the royal family. The Russian moved off the yacht the same day.

.. His seemingly boundless ambitions have led many Saudis and foreign officials to suspect that his ultimate goal is not just to transform the kingdom, but also to shove aside the current crown prince, his 57-year-old cousin, Mohammed bin Nayef, to become the next king. Such a move could further upset his relatives and — if successful — give the country what it has never seen: a young king who could rule the kingdom for many decades.

.. Many young Saudis admire him as an energetic representative of their generation who has addressed some of the country’s problems with uncommon bluntness. The kingdom’s news media have built his image as a hardworking, businesslike leader less concerned than his predecessors with the trappings of royalty.

Others see him as a power-hungry upstart who is risking instability by changing too much, too fast.

.. The crown prince has diabetes, and suffers from the lingering effects of an assassination attempt in 2009 by a jihadist who detonated a bomb he had hidden in his rectum.

.. His younger cousin, meanwhile, has worked to remain in the spotlight, touring world capitals, speaking with foreign journalists, beingphotographed with the Facebook chairman Mark Zuckerberg and presenting himself as a face of a new Saudi Arabia.

.. the Saudi-led war in Yemen, which since it was begun last year has failed to dislodge the Shiite Houthi rebels and their allies from the Yemeni capital. The war has driven much of Yemen toward famine and killed thousands of civilians while costing the Saudi government tens of billions of dollars.

.. Although all agreed that the kingdom had to respond when the Houthis seized the Yemeni capital and forced the government into exile, Prince bin Salman took the lead, launching the war in March 2015 without full coordination across the security services.

.. Prince bin Nayef, who won the respect of Saudis and American officials for dismantling Al Qaeda in the kingdom nearly a decade ago and now sees it taking advantage of chaos in Yemen

.. This is part of what analysts say is Prince bin Salman’s attempt to foster a sense of Saudi national identity that has not existed since the kingdom’s founding in 1932.

“There has been a surge of Saudi nationalism since the campaign in Yemen began, with the sense that Saudi Arabia is taking independent collective action,”

.. “His main message is that Saudi Arabia is a force to be reckoned with,” Mr. Katulis said.

.. Saudi Arabia is one of the world’s few remaining absolute monarchies, which means that Prince bin Salman was given all of his powers by a vote of one: his own father.

.. Prince bin Nayef was the first of the founder’s grandsons to be put in line. Many hailed the move because of the prince’s success at fighting Al Qaeda and because he has only daughters, leading many to hope he would choose a successor based on merit rather than paternity.

.. Read in one way, the documents are an ambitious blueprint to change the Saudi way of life. Read in another, they are a scathing indictment of how poorly the kingdom has been run by Prince bin Salman’s elders.

.. Read in one way, the documents are an ambitious blueprint to change the Saudi way of life. Read in another, they are a scathing indictment of how poorly the kingdom has been run by Prince bin Salman’s elders.

.. Many members of the royal family remain wary of the young prince’s projects and ultimate ambitions. Some mock him as the “Prince of the Vision” and complain about his army of well-paid foreign consultants and image-makers.

.. Many members of the royal family remain wary of the young prince’s projects and ultimate ambitions. Some mock him as the “Prince of the Vision” and complain about his army of well-paid foreign consultants and image-makers.

.. Personal relationships have long been the bedrock of American-Saudi relations, yet the Obama administration has struggled to find someone to develop a rapport with the prince. The job has largely fallen to Secretary of State John Kerry

.. In September 2015, dinner at Mr. Kerry’s house ended with Prince bin Salman playing Beethoven on the piano for the secretary of state and the other guests.

.. His desire to reimagine the Saudi state is reflected in his admiration — some even call it envy — for the kingdom’s more modern and progressive neighbor in the Persian Gulf, the United Arab Emirates.

.. “If the king’s health starts to deteriorate, Mohammed bin Salman is very likely to try to get Mohammed bin Nayef out of the picture,” said Mr. Riedel, the former C.I.A. analyst.